9911796707
TMI Blog1944 (6) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... business of ginning and pressing cotton. This partnership, which was an illegal partnership, was called the Om Press Company and ultimately the total amount subscribed by the various partners came to Rs. 66,100, each share held by the partners being valued at Rs. 250. It appears that in August, 1938, these 109 partners or their successors had decided that the partnership undertaking should be converted into a limited company and the business carried on by such company. The respondent company the Om Press Company Limited was duly incorporated and registered. The objects for which the company was established are set out in clause 3 of the Memorandum of Association and sub-clause ( a ) of that clause is in these terms: "To acquire and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 shares. He applied to have his name removed from the list of shareholders on the register and the matter came before the Company Judge on the 15th of November, 1938. The Company did not object and Sobha Singh's name was duly removed. The other appellants made similar applications, and on the 7th of February, 1939, these applications were also allowed by the learned Company Judge and an order was made rectifying the register by removing the names of the petitioners. In this order the learned Judge held that as the petitioners had paid nothing in respect of the shares, which had been allotted to them, no order for repayment was necessary. It is said that on the 27th February, 1939, the appellants applied to this Court for an order direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason of the previous orders of this Court. In due course the following issue was framed: "Does the petition lie at the suit of the petitioner?" On the 15th of May, 1941, the parties before Mr. Justice Monroe appeared to have arrived at a compromise. But that was made subject to the confirmation of its terms by the Company. Unfortunately the company refused to ratify the proposed terms and the compromise fell through. The matter was finally decided on the 24th of April, 1942, when the Company Judge dismissed the petition for winding up. In his view the petitioners were not creditors and had no claim against the company upon any contract as alleged by them. According to the learned Judges the petitioners were in fact seeking to recover pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any factors such as the agreements, if any, between the appellants and the company, whether such agreements, if any, were duly performed, whether the matter has already been judicially decided and such like. Can such matters be gone into on a winding up petition based on the neglect of the company to pay its debts? Section 163, sub-section (1) is in these terms: "A company shall be deemed to be unable to pay its debts (1) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding five hundred rupees then due, has served on the company, by causing the same to be delivered by registered post or otherwise at its registered office, a demand under his hand requiring the company to pay the sum so due and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the company had neglected to pay the sum due to the petitioners. The Bench came to the conclusion that in such circumstances the company could not be said to have neglected to pay. They had declined to pay because of their cross claim which was undoubtedly a bona fide one and which might be established. It was held, as in England, that where there was a bona fide dispute as to the liability of the company and the money had not been paid by the company by reason of such dispute the company had not neglected to pay their debts as the term is used in section 163, Indian Companies Act. It appears to me that the Bench case, to which I have referred, precisely covers the facts of the present case. There is a very serious dispute in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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